Commercial property owners could claim a federal investment credit for converting non-residential buildings into affordable housing under a bipartisan, bicameral bill proposed on July 11 by U.S. Reps. Mike Carey (R-OH) and Brian Fitzpatrick (R-PA) that’s designed to boost not only affordable housing, but would ramp up the economies on America’s Main Streets.
“Between high housing costs and the rise of remote work, formerly prosperous neighborhoods across the country are struggling,” Rep. Carey said on July 12. “The solution is right in front of us.”
“But even though vacant commercial and office space is sitting unused, converting these properties into housing is so expensive it is often uneconomical,” he added. “This bill will allow communities to meet their residents’ need for affordable, abundant housing and allow American downtowns and main streets to thrive.”
Rep. Carey sponsored the Revitalizing Downtowns and Main Streets Act, H.R. 9002, alongside 11 original cosponsors, including Rep. Fitzpatrick and U.S. Reps. Mike Kelly (R-PA), Carol Miller (R-WV), and Jimmy Gomez (D-CA). U.S. Sen. Debbie Stabenow (D-MI) on the same day led several Democrats in introducing the same-named companion bill, S. 4693, in the Senate.
“With housing costs skyrocketing and supply dwindling, the American Dream of homeownership has become unattainable for far too many families,” said Rep. Fitzpatrick. “Our bipartisan Revitalizing Downtowns and Main Streets Act aims to convert empty commercial buildings into housing units. This initiative will help reduce housing costs and increase the housing supply in our community and nationwide.”
According to Pew Research, 49 percent of Americans lack affordable housing in their communities. At the same time, commercial properties are sitting vacant following the COVID-19 pandemic, which forced more Americans to work remotely.
The measure would provide a federal tax credit to facilitate the conversion of older, underutilized office and other commercial buildings into residential housing. The credit amount for any taxable year would be equal to 20 percent of the qualified conversion expenditures with respect to a qualified converted building, according to the text of the bill.
Additionally, the proposed bill would ensure that converted properties would increase the supply of affordable housing by requiring that during the 30-year period following conversion, no less than 20 percent of the residential units in the buildings be reserved for individuals with incomes at 80 percent or less of an area’s median income, the text says.